Derailment is a huge blow to bid for deals in Brazil, elsewhere

Spanish crash threatens vital foreign rail-tech sales


The horrific train crash in Spain that killed 78 people comes at the worst time for the recession-hit nation’s railway sector, which is pushing to win new markets for its high-speed trains.

Spain is in the running for a contract worth $16.4 billion for a high-speed rail network in Brazil linking the cities of Rio de Janeiro, Sao Paulo and Campinas that will be awarded in September.

The country, which two years ago won a contract to build and operate a high-speed rail link in Saudi Arabia, is also eyeing new markets in the United States, Russia, Kazakhstan and the United Arab Emirates.

“Technologically Spain is a pioneer in high-speed rail,” said Alejandro Lago, a logistics professor at the Iese business school in Barcelona.

Since the 1960s, the country has had trains made by its Talgo train-maker that could run at speeds of up to 200 kph, he added.

Spain has invested heavily in road and rail links over the past decade and it now has the second-largest high-speed train network in the world, spanning 3,100 km. Only China’s is larger.

The train derailed about 4 km from the station in northwestern Santiago de Compostela on Wednesday.

The driver reportedly said he was doing 190 kph as he took the bend, where the speed limit is just 80 kph.

The injured driver, Francisco Jose Garzon Amo, was released from hospital Saturday, but he was still being held in a police station as authorities increasingly focused on his culpability.

Garzon was to appear before a judge by Sunday evening, a hotly awaited opportunity for him to give his explanation for Spain’s deadliest train crash in decades.

Garzon has been under the microscope, with the country’s railway agency saying it was his responsibility to brake before going into the high-risk curve where the train careered off the rails and smashed into a wall. It is still not clear whether the brakes failed or were never used, and Garzon has remained quiet so far.

Interior Minister Jorge Fernandez Diaz said Garzon is now being held on suspicion of negligent homicide. Authorities had previously said he was detained on suspicion of recklessness.

The crash came two weeks after another rail accident killed six in France, raising questions about train safety across Europe. But experts say rail travel remains one of the safest forms of transport on the continent and European rail networks are among the safest in the world.

Figures compiled by the European Union show railway accident figures shrinking steadily by about 6 percent a year in the 28-nation bloc, totaling a 70 percent reduction in the accident rate from 1990-2012.

Even so, a May report by the EU’s railway agency says that around 2,400 “significant” accidents still occur each year. The vast majority, however, involve collisions with cars at level crossings and people — often suicide victims — being hit by trains. Those incidents kill some 1,200 people a year, the report says.

The crash — Spain’s deadliest rail disaster in decades — is a huge blow for the country’s bid for the deal in Brazil.

Brazil’s bidding process for the country’s lucrative infrastructure project specifies that firms in the running for the contract cannot have had an accident that caused deaths in their high-speed rail network in the last five years, El Pais reported.

That would appear to disqualify Renfe, according to the newspaper.

The rule — which applies only if an accident is due to “operational causes” — has already disqualified China’s Communications Co. Ltd. from the running due to an accident in June 2011 that killed 33 people.

The private and public Spanish companies that make up the consortium in the running for the contract have been reluctant to speak publicly about the impact of the accident on their bid.

But several unnamed sources close to the consortium, which includes Renfe and Spanish rail network administrator Adif, told Spanish business daily El Economista that they feel the contract has been lost.

This will be a major setback for Spain, which had been hoping to bank on its recent deal with Saudi Arabia to obtain similar projects.

“It’s important because we’re talking about high-speed rail and we want to show that we are world leaders in this area,” Rafael Catala, Spain’s secretary of state for transport, said in an interview earlier this month.

In 2011, a Spanish consortium won a €6.7 billion (¥874 billion) contract to build and operate a 450-km-long high-speed rail link in the desert between the Saudi holy cities of Mecca and Medina.

Spain’s first big foreign rail contract was signed with Turkey. A Spanish consortium built the high-speed rail link between Ankara and Istanbul, which was inaugurated in 2009.